A workers' compensation primer

A workers’ compensation primer D Gary Rischitelli, MD, JD, MPH*

Background: Workers’ Compensation is a no-fault, administrative system designed to provide injured workers with medical care and wage replacement benefits without the delay, expense, and uncertainty of civil litigation. The system evolved from common law at the beginning of the twentieth century and was designed as a compromise between workers and employers in which each group surrendered certain legal rights and privileges in exchange for a speedier and more certain outcome. Compensation for occupational diseases like occupational asthma, rhinitis, or dermatitis is often complicated by the difficulty of proving that the condition “arose out of and in the course of employment.” Physicians play an important role in these determinations through their expert opinion. Results: Physicians must develop a consistent model to address these issues, and then present their findings and conclusions in a clear, well-reasoned, and compelling manner. In the end, the causation analysis should not solely depend on unsupported “opinion” or proceed from the conscious or unconscious biases of the physician. Conclusion: Biased, illogical, scientifically unsupported, or even incompletely explained conclusions damage the credibility of physicians in the community and undermine the purposes of the workers’ compensation system itself. Ann Allergy Asthma Immunol 1999;83:614– 617.

HISTORICAL BACKGROUND Workers’ Compensation law arose from the body of common law governing the relationship of master and servant. In English common law, masters had certain duties to their servants and employees which included providing a safe place to work, providing safe tools and equipment, warning their servants of dangers, providing sufficient help to complete assigned tasks, and making and enforcing safe work practices. These common law principles defined employer liability until the advent of the industrial revolution. In response to the rising death and injury rates of the industrial revolution, governments found that they needed a new approach to compensating individuals injured on the job. * Assistant Professor, Departments of Emergency Medicine and Public Health and Preventive Medicine; Scientist, Center for Research in Occupational and Environmental Toxicology; Oregon Health Sciences University, Portland, Oregon. Adjunct Professor of Law, Northwestern School of Law of Lewis and Clark College, Portland, Oregon. Received for publication May 28, 1999. Accepted for publication in revised form August 24, 1999.

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Two distinct pathways emerged contemporaneously, the American and British liability systems, and the social insurance programs of Europe, the first beginning in Germany in 1838. The history of workers’ compensation in the United States began with the passage of a law in Georgia that made railroads liable to their employees for negligence claims. By 1908, nearly every other state had done the same, and the Federal government had passed similar statutes covering interstate railroad workers and seamen. These forerunner statutes, however, were not true workers’ compensation statutes because the workers still had to file a lawsuit to receive compensation. The requirement to file a lawsuit guaranteed costly, lengthy, and uncertain proceedings for the worker as well as the threat of employer or community ill will and difficulty finding future employment. The first true workers’ compensation act in the United States was passed in Maryland in 1902. It was declared unconstitutional in 1904 because of concerns that it impaired an employer’s right to a jury and violated the

separation of powers doctrine. Massachusetts tried to pass a voluntary workers’ compensation act in 1908. It escaped constitutional scrutiny because of its voluntary basis but was largely ineffective. In 1909, Montana passed a compulsory workers’ compensation act for coal miners. Both employees and employers were required to contribute to this fund. The injured worker could then choose to pursue a workers’ compensation or a civil liability remedy. This act was declared unconstitutional in 1911 because of concerns about equal protection and potential double liability for employers under a workers’ compensation and civil liability claim. In 1909 the state of New York passed two statutes. One, a compulsory workers’ compensation system for dangerous jobs, was declared unconstitutional in 1911. A parallel, voluntary statute covered all other workers and was largely unsuccessful. In 1913, the New York Legislature amended the state constitution to allow for a compulsory workers’ compensation system and subsequently, a law covering dangerous occupations was declared constitutional in 1915. Once the constitutional hurdle was passed, by 1920 nearly all of the United States had enacted some form of workers’ compensation. The last state to have a comprehensive workers’ compensation statute was Mississippi in 1949. Despite this long history, however, workers’ compensation law is not static. Workers’ compensation acts undergo constant change and revision at the state legislative level. Recently, a significant wave of reform has swept the nation in response to concerns about rising workers’ compensation costs and premiums. These reforms were designed to “balance” a system that many legislators felt had tipped too far in favor of workers’ benefits. Many states were motivated by

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the high cost of workers’ compensation compared to neighboring states and a desire to make their state more business friendly, thereby attracting new jobs and investment. Because workers’ compensation is a state by state patchwork of legislation, it is highly variable and can present with complex issues of overlapping jurisdiction. Many states have both general workers’ compensation acts and specific acts governing particular occupations or diseases. Today’s highly mobile work force can result in a claim by a worker domiciled in State A, employed by an organization in State B and injured while working in State C. Each of these states may treat the compensability, provision of medical care, and wage replacement benefits in very different ways. Superimposed on this patchwork of state acts, there is a complex federal system of workers’ compensation. Federal workers’ compensation systems include the Federal Employees’ Compensation Act (FECA), the Federal Employers Liability Act (FELA), the Merchant Marine Act (Jones Act) and the Long Shore and Harbor Workers’ Compensation Act (LHWCA). There are also a few other miscellaneous federal systems for compensation for occupational illness and injury. For example, the Mine Safety and Health Act of 1969 (MSHA) provides some basic income maintenance for injured miners. Additionally, the Black Lung Benefits Act of 1972 expanded these benefits and created a national compensation system for miners with coal workers’ pneumoconiosis. The underlying theory of workers’ compensation is that the cost of worker injury or illness is ultimately borne by the purchaser of the goods or service. The workers’ compensation system is essentially a compromise struck as the “industrial bargain” at the advent of the modern industrial age. In essence, both employees and employers gave up certain rights in return for a more predictable (and therefore insurable) risk. Employees gave up the right to sue their employers, the right to have their cases heard by a jury, and the

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opportunity to receive large civil awards. The employer, in return, gave up the affirmative defenses available with common law. In return for these compromises, the employee got prompt resolution of claims, a modest but certain recovery, and a no-fault system that eliminated the employee’s need to prove negligence on the part of the employer. The employer received an assurance of a fixed and limited liability for worker injury and illness, essentially an “insurable risk.” Prior to this compromise, employees faced the “unholy triad” of affirmative defenses of common law. The fellow servant doctrine held that a master was not liable to a servant for injuries caused by the negligence of a fellow servant. Contributory negligence held that there was no liability of a master if the servant was in any way negligent in the events leading up to the injury. The employee himself was responsible for injury due to his “failure to exercise reasonable care for his own safety” or “failure to use precautions that ordinary prudence required.” The assumption of risk doctrine held that when a servant had voluntarily agreed to assume dangers normally and ordinary incident to the work, there was no liability for injuries arising from that work. This “unholy triad” of defenses made it exceedingly difficult for workers to recover against their employers. On the other hand, however, the employers always were at risk of a large negligence award particularly if a sympathetic jury found the employer’s behavior to be negligent. PURPOSE AND COVERAGE Workers’ compensation was designed to move away from the ordinary scheme of civil liability, to a no-fault administrative system. It was designed to provide wage replacement and to cover the costs of medical care. Despite being a no-fault administrative system, however, employees must still prove that their accident, injury or illness arose out of and in the course and scope of their employment. The issues and fact patterns surrounding this determination, make workers’ compensa-

tion frequently every bit as litigious and adversarial as the civil justice system. Despite being the exclusive remedy, there may be “third party suits” that spin off from a workers’ compensation claim. These can include suits for property damage, product liability actions, suits for negligent inspection, medical malpractice, or wrongful discharge and other employment discrimination suits. In workers’ compensation, disputes are initially resolved at administrative hearings before a commission or administrative law judge. There is limited discovery and relaxed rules of evidence. Many systems provide for fixed legal fees and for time lines that are designed to expedite claims resolution. In all systems, however, the aggrieved worker or employer can appeal the outcome of the administrative process to the courts. Workers’ compensation benefits are limited to wage replacement and medical costs with no pain and suffering or punitive damages. Benefits are awarded on either a medical loss theory or wage loss theory. The compensation formula varies by jurisdiction. The medical loss theory awards compensation based on either an anatomic or functional loss (ie, a scheduled award for the loss of a finger, or a limitation on the employee’s ability to perform some function such as seeing, hearing, or walking). The wage loss theory, awards benefits based on the diminution of a worker’s wage earning capacity (ie, the impact of the anatomic or functional loss on their future employment opportunities and wage earning capacity). Many states mix both elements of the medical loss and wage loss theory. In a claim for workers’ compensation benefits, the employee must prove that an illness or injury arose out of and in the course of employment. This simply stated test belies the complexity of its interpretation. This test actually includes three distinct legal concepts regarding the scope of risk, the causal relationship, and the factual relationship between the work and the injury or illness. Coverage issues often arise when analyz-

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ing risks related to the employment (work accidents or exposures), risks that are peculiar or personal to the worker (family medical history, genetic predisposition, lifestyle, etc), and neutral risks that are not within the control of the employee or employer (ie, acts of God). Issues of causation become even more complex with occupational diseases. Injuries are relatively easy to fix in time, the conditions of occurrence can be examined or recreated in an investigation, and it is possible to call witnesses to describe the circumstances around the injury. Diseases, on the other hand, often develop insidiously by an invisible process that may be multifactorial. Additionally, many occupational diseases have a long latency period, blurring memories regarding the conditions of work, levels of exposure, or other circumstances pertinent to the causal connection. Today, however, most states provide coverage for occupational disease through a variety of mechanisms. These can include (1) the use of a general definition of occupational disease in the workers’ compensation act, (2) an expanded definition of injury or accident to include “disease,” (3) the use of a scheduled list of occupational diseases and a “catch all” definition, (4) unrestricted disease coverage provisions, or (5) a separate occupational disease act. Often the determination of whether a disease is an occupational or ordinary disease ultimately depends on a jurisdiction’s approach to the scope of risk doctrine. The state’s scope of risk analysis will therefore determine whether these conditions would be compensable under that state’s workers’ compensation system. States therefore approach the compensability of occupational, work-related, or work-aggravated asthma differently depending on their underlying workers’ compensation statute, their description of the scope of risk, and their definition of occupational injury or disease. For example, in Hernandez v. Texas Employers’ Insurance Association,2 the court noted that a compensable injury, as the term is used in the

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Texas workers’ compensation system, includes occupational diseases. An occupational disease is any disease arising out of and in the course of employment that causes damage or harm to the physical structure of the body but an “ordinary disease of life,” is not compensable. An ordinary disease is one in which the general public is exposed outside the scope of employment. The court noted, however, that a workers’ compensation claim by an employee who suffered asthma and allergic rhinitis did not require determination of whether asthma was an ordinary disease, but instead required a determination whether there was a direct or indirect evidence of causal connection between the disease and employment. Absent evidence of such a link, the disease was not compensable and was therefore an ordinary disease of life. The mere appearance of symptoms during a period of employment did not mandate the conclusion that employment caused asthma and allergic rhinitis, but rather expert medical testimony was required in order to establish that the condition of the work place caused the employee’s asthma. Physicians are often bewildered by the use of legal terms in these statutes and administrative rules. These include the frequent use of terms such as: significant, substantial, possible, probable, major, and aggravation. Significant describes any contribution which is weighty, has a notable effect, and is at least in part responsible for an outcome. Substantial includes elements which are worthy of note and which may have had an effect that should not be ignored, ie, more than a “de minimis” contribution. The term possible describes a concept or event that is “conceivable.” Although broad, it should be used to describe outcomes or events that are reasonably anticipated. The quip that “anything is possible” may be trite, but is not very helpful in the determination of medical facts. Physicians should exercise their professional medical judgment in determining whether the connection between and exposure and an illness is possible. Probable, means “more

likely than not” (ie, a greater than 50% probability). Major contribution describes an element, which may be more than 50% of the total cause, or the largest proportionate share of the cause, depending on a state’s definition. Finally, aggravation may describe both symptomatic and/or pathological worsening of the worker’s condition depending on a state’s definition. THE PHYSICIAN’S ROLE In the determination of medical causation, therefore, the key issue is whether the employment exposure caused or substantially contributed to the worker’s illness or injury. If the employment relationship is unclear, vague or uncertain, then the causal connection has not been established. Physicians should focus on the medical causation question and not become involved in the scope of risk issue, which is governed by legal doctrine and established through the legal causation model. Frequently, however, patients, attorneys and insurers attempt to pull physicians into this determination because of the weight and credibility of the physician’s opinion. Physicians should remember that compensability is a legal, not a medical, determination. Faced with the bewildering legal and administrative components of the workers’ compensation, physicians must develop a working model to assure a consistent approach to the medical questions surrounding occupational disease. A simple 3-step model3 involves first determining, “Does the worker have a disease, and if so, what is it?” This threshold step should be determined using scientifically supported methods and professionally accepted guidelines for arriving at a specific medical diagnosis. If yes, then the physician should address, “Was the worker, because of his or her job, exposed to some risk of contracting the disease?” This must be addressed in light of the scope of risk doctrine used in a particular jurisdiction because the question may be asking whether the worker was exposed to a proximate, peculiar, increased, actual or positional

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risk depending on the jurisdiction. Although this is ultimately a legal issue, physicians need to understand the impact of their opinion, particularly with regard to the interpretation of epidemiologic or laboratory data supporting the relationship between the exposure and the illness. Last, “Was there an actual condition or exposure in this worker’s job that likely caused or significantly contributed to the diseases development or aggravation?” This question addresses the particular causal and factual connection in a particular worker’s claim. For example, the physician may be asked to interpret the relevance of epidemiologic data regarding the risk of mesothelioma following asbestos exposure in light of a particular worker’s individual exposure history, including their smoking history. Another slightly different statement of this model involves specifically determining: (1) is there objective evidence of disease; (2) is there objective evidence of exposure; (3) is there credible evidence, in general, supporting a causal connection between the exposure and the disease, and (4) is there sufficient evidence, in this worker’s case, to support a causal connection between his or her exposures and the development of the disease or injury? Credible history or objective evidence should support each of these determinations before the final conclusion of work causation is offered. The worker’s attending physician should be a medical advocate for reasonable, necessary, and appropriate care of the employee’s condition. The attending physician, however, should not become a benefit, disability, or employment rights advocate for the employee. The system places that duty on the claimant’s attorney, and physicians are often ill prepared or ill informed to assume this role. Finally, the physician must provide a thoughtful, expert, and unbiased review of the medical evi-

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dence in the case. The examiner should take a “fresh look” at all medical aspects of the claim to assure that no important diagnostic clues have been missed, and must treat the claimant in a professional and thorough manner. Physicians who participate in the workers’ compensation system may be asked to provide deposition testimony. In order to be credible and to contribute meaningfully to the process, it is important to be prepared for depositions. Medical records should be thoroughly reviewed and the physician should be familiar with the content of his own notes as well as those of consultants. Physicians should listen carefully to the question posed by the attorney, and should take care to answer the question carefully and honestly. The physician, however, should not offer answers or opinions that are not the directly addressed in the question. If a physician is unsure of the question, or feels that it is misleading in any way, he or she should ask for clarification or restatement. The physician should not be afraid of making the deposing attorney craft a cogent and reasonable question prior to offering his opinion or answer. Finally, depositions can be fatiguing. It is completely reasonable to ask for and take a break whenever you need one. More frequently than testimony, it is the medical records and reports produced by attending physicians and consultants that frequently determine the outcome of a workers’ compensation claim. Recognize that any documents relating to a worker’s compensation claim are legal or potentially public documents. For this reason, the physician must be logical, methodical, and precise. Emotional statements, derogatory remarks, or comments not directly related to the medical condition should be avoided. When the physician makes a conclusion or inference, the reason why should be carefully explained. One of the most effective

ways to assure a cogent and well reasoned report is to employ a common legal outlining technique. This technique requires that (1) each important diagnostic or treatment issue is clearly identified, (2) the medical evidence or diagnostic rule regarding that issue is clearly and concisely stated, (3) the argument of how the medical evidence is relevant to the issue presented, (4) any opposing or conflicting evidence supporting a counter argument is presented, and finally (5) the physician’s conclusion regarding the issue. When a physician’s opinion is organized using this outlining technique, the product is a clear, well-reasoned, and compelling report. CONCLUSION In summary, the workers’ compensation system despite its flaws is likely to persist for the foreseeable future. It is the result of a carefully balanced compromise struck over 100 years ago. It is one social compact that labor, management, legislators, and the courts are hesitant to completely abandon. Still, it is dynamic and constantly changing to reflect changes in the larger political and social fabric of our country as each stakeholder strives to correct perceived imbalances and to improve outcomes in the system. REFERENCES 1. Hood JB, Hardy BA, Lewis HS. Workers’ Compensation and Employee Protection Laws. 2 ed. West. St. Paul 1990. 2. Hernandez v. Texas Employers’ Insurance Association, 783 SW2d 250 (1989). 3. Hansel v. Sherman Textiles v. Traveler’s Insurance Company, 283 SE2d 101(1981), (J. Exum, concurring). Request for reprints should be addressed to: D Gary Rischitelli, MD, JD, MPH Oregon Health Sciences University 3181 S W Sam Jackson Park Rd, OP20-C Portland, OR 97201

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